Plenty of skeptical investors are mulling over pouring money into the Tehran Stock Exchange (TSE), as the bull market has been reigning for more than past two months at the equity market.
The TSE’ drastic shift is becoming more evident as the market’s sentiment within the past two months, ending October 29, demonstrates the TEDPIX’s 1.9 percent growth.
The prospect of nuclear talks, which aims to tackle the dispute between Tehran and the West over Iran’s nuclear program, doesn’t seem gloomy any more, with the November 24 deadline fast approaching.
Stocks’ semi-annual reports ending September 22 have contributed to the market’s uplift, as some of the leading companies, which are among those that have the heaviest weighting in the TEDPIX met the expectations and outperformed.
As financial groups, chemicals and the auto sectors upped their previous forecasts, skittish investors lined up at the stock market once again to shore up their portfolios.
The economy has churned out some pretty encouraging news lately, although considering the heavy losses at the equity market within past twelve months, some investors still remain shaky.
Despite the uncertainty over the potential deal in the nuclear talks between Iran and the P5+1, the stock market is creeping upward and the likelihood of the stability, even without a nuclear deal on November 24, is not beyond the reality.
Weekly Report
Stocks across various listed industries at the TSE have staged broad rallies within the past two weeks, although the pace of recovery this week was not as robust as the previous week.
According to the TSE’s website, most of indices settled in green and helped the TEDPIX to tick up 18 points or 0.02 percent to 74,151.1 within the week ending October 29.
The first market index soared 175 points or 0.32 percent to end at 54,881.8. The free floating index rose 521 points or 0.62 percent to 84,832.8. The blue chip index edged up 3 points or 0.1 percent to finish at 3,418.1, and the financial index managed to top all indices as it surged 1,114 points or 0.81 percent to end the week at 139,121.1.
The second market index was the market laggard as it failed to contribute to the TEDPIX’s uplift and tumbled 1,024 points or 0.71 percent to end at 144,155.2. Besides, the industry index went down 66 points or 0.11 percent to stand at 62,446.9.
The equity market’s turbulences, however, made the trading volume and value seesaw within the past few trading days. Based on the TSE’s website, 3.12 trillion shares were traded within the week, demonstrating 19.9 percent decline compared to the previous week. Besides, total trading value reached nearly 8.51 trillion rials, which indicates a 24 percent decrease compared to the same period last week.
The stock market has already initiated to wipe out the big losses of the past 12 months, and it has been partly successful and managed to push the loss rate down to 6.2 percent, compared to where the TEDPIX stood two months ago, when the rate was almost 9.3 percent.
As foreign investment in Iran has still not officially started, the foreign portfolio managers as well as the local investors are precisely analyzing the market’s developments, while planning to enter the TSE to enjoy the capacities of what many analysts call the “last large untapped frontier market in the world.”
The equity market analysts believe that the heavy losses within the past 12 months put investors on the edge, as they began panicking and were, thus, forced to sell off their shares.
This group of investors prefers to hedge their bets and always invest in competing markets, as they enjoy a fixed rate apart from stock market fluctuations.
Although, the companies’ semi-annual reports coupled with the positive atmosphere at the equity market is making them to mull over investing on high-yield shares, the relatively big earnings of listed companies have recently raised their dividends.
As the pace of recovery is increasing, and the capital market continues its upward trend, there seem to be more positive days ahead both in the medium and the long run.
